Delaware | 001-37534 | 38-3942097 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit No. | Description | |
99.1 |
PLANET FITNESS, INC. | ||
By: | /s/ Dorvin Lively | |
Name: Title: | Dorvin Lively President and Chief Financial Officer |
• | Total revenue increased from the prior year period by 40.2% to $136.7 million. |
• | System-wide same store sales increased 9.7%. |
• | Net income attributable to Planet Fitness, Inc. was $17.5 million, or $0.20 per diluted share, compared to net income attributable to Planet Fitness, Inc. of $15.3 million, or $0.18 per diluted share in the prior year period. |
• | Net income was $20.5 million, compared to net income of $18.9 million in the prior year period. |
• | Adjusted net income(1) increased 47.9% to $27.7 million, or $0.28 per diluted share, compared to $18.7 million, or $0.19 per diluted share in the prior year period. |
• | Adjusted EBITDA(1) increased 24.0% to $53.8 million from $43.4 million in the prior year period. |
• | 41 new Planet Fitness stores were opened during the period, bringing system-wide total stores to 1,646 as of September 30, 2018. |
• | Franchise segment revenue increased $19.3 million or 54.2% to $54.8 million from $35.6 million in the prior year period, which includes commission income and the above-mentioned $11.4 million of national advertising fund revenue; |
• | Corporate-owned stores segment revenue increased $6.8 million or 24.0% to $35.4 million from $28.6 million in the prior year period, $5.2 million of which is from new corporate-owned stores opened or acquired since June 30, 2017; and |
• | Equipment segment revenue increased $13.1 million or 39.1% to $46.4 million from $33.4 million in the prior year period, driven by an increase in equipment sales to new stores and an increase in replacement equipment sales to existing franchisee-owned stores. |
• | Franchise segment EBITDA increased $7.2 million or 23.9% to $37.1 million driven by royalties from new franchised stores opened since June 30, 2017, a higher average royalty rate and higher same store sales of 9.9%; |
• | Corporate-owned stores segment EBITDA increased $3.2 million or 26.8% to $15.3 million driven primarily by an increase in same store sales, higher annual fees and from additional clubs opened and acquired since June 30, 2017; and |
• | Equipment segment EBITDA increased by $2.0 million or 25.7% to $9.7 million driven by an increase in equipment sales to new stores and an increase in replacement equipment sales to existing franchisee-owned stores. |
• | Total revenue increase of approximately 33% as compared to the year ended December 31, 2017; |
• | System-wide same store sales growth of approximately 10%; and |
• | Adjusted net income and adjusted net income per diluted share to increase approximately 43% as compared to the year ended December 31, 2017. |
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenue: | ||||||||||||||||
Franchise | $ | 41,997 | $ | 31,413 | $ | 129,575 | $ | 94,485 | ||||||||
Commission income | 1,448 | 4,149 | 5,012 | 15,668 | ||||||||||||
National advertising fund revenue | 11,377 | — | 32,997 | — | ||||||||||||
Corporate-owned stores | 35,406 | 28,560 | 102,365 | 83,886 | ||||||||||||
Equipment | 46,428 | 33,374 | 128,589 | 101,875 | ||||||||||||
Total revenue | 136,656 | 97,496 | 398,538 | 295,914 | ||||||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of revenue | 36,871 | 25,819 | 100,114 | 78,395 | ||||||||||||
Store operations | 18,751 | 15,551 | 55,154 | 45,339 | ||||||||||||
Selling, general and administrative | 17,233 | 14,071 | 52,066 | 42,659 | ||||||||||||
National advertising fund expense | 11,377 | — | 32,997 | — | ||||||||||||
Depreciation and amortization | 8,863 | 8,137 | 25,947 | 23,982 | ||||||||||||
Other loss (gain) | (12 | ) | (36 | ) | 958 | 280 | ||||||||||
Total operating costs and expenses | 93,083 | 63,542 | 267,236 | 190,655 | ||||||||||||
Income from operations | 43,573 | 33,954 | 131,302 | 105,259 | ||||||||||||
Other expense, net: | ||||||||||||||||
Interest income | 2,025 | 18 | 2,480 | 24 | ||||||||||||
Interest expense | (17,909 | ) | (8,938 | ) | (35,725 | ) | (26,735 | ) | ||||||||
Other income (expense) | (27 | ) | 408 | (338 | ) | 157 | ||||||||||
Total other expense, net | (15,911 | ) | (8,512 | ) | (33,583 | ) | (26,554 | ) | ||||||||
Income before income taxes | 27,662 | 25,442 | 97,719 | 78,705 | ||||||||||||
Provision for income taxes | 7,190 | 6,540 | 23,335 | 23,933 | ||||||||||||
Net income | 20,472 | 18,902 | 74,384 | 54,772 | ||||||||||||
Less net income attributable to non-controlling interests | 3,001 | 3,557 | 11,158 | 18,173 | ||||||||||||
Net income attributable to Planet Fitness, Inc. | $ | 17,471 | $ | 15,345 | $ | 63,226 | $ | 36,599 | ||||||||
Net income per share of Class A common stock: | ||||||||||||||||
Basic | $ | 0.20 | $ | 0.18 | $ | 0.72 | $ | 0.48 | ||||||||
Diluted | $ | 0.20 | $ | 0.18 | $ | 0.72 | $ | 0.48 | ||||||||
Weighted-average shares of Class A common stock outstanding: | ||||||||||||||||
Basic | 88,047 | 85,663 | 87,727 | 76,391 | ||||||||||||
Diluted | 88,458 | 85,734 | 88,064 | 76,435 |
September 30, | December 31, | |||||||
2018 | 2017 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 572,731 | $ | 113,080 | ||||
Restricted cash | 35,915 | — | ||||||
Accounts receivable, net of allowance for bad debts of $74 and $32 at September 30, 2018 and December 31, 2017, respectively | 26,145 | 37,272 | ||||||
Due from related parties | — | 3,020 | ||||||
Inventory | 6,142 | 2,692 | ||||||
Restricted assets – national advertising fund | 3,418 | 499 | ||||||
Prepaid expenses | 3,813 | 3,929 | ||||||
Other receivables | 10,993 | 9,562 | ||||||
Other current assets | 6,318 | 6,947 | ||||||
Total current assets | 665,475 | 177,001 | ||||||
Property and equipment, net of accumulated depreciation of $48,960, as of September 30, 2018 and $36,228 as of December 31, 2017 | 97,240 | 83,327 | ||||||
Intangible assets, net | 237,896 | 235,657 | ||||||
Goodwill | 199,513 | 176,981 | ||||||
Deferred income taxes | 416,707 | 407,782 | ||||||
Other assets, net | 4,608 | 11,717 | ||||||
Total assets | $ | 1,621,439 | $ | 1,092,465 | ||||
Liabilities and stockholders' deficit | ||||||||
Current liabilities: | ||||||||
Current maturities of long-term debt | $ | 12,000 | $ | 7,185 | ||||
Accounts payable | 23,400 | 28,648 | ||||||
Accrued expenses | 26,764 | 18,590 | ||||||
Equipment deposits | 11,449 | 6,498 | ||||||
Restricted liabilities – national advertising fund | 3,418 | 490 | ||||||
Deferred revenue, current | 21,959 | 19,083 | ||||||
Payable pursuant to tax benefit arrangements, current | 25,578 | 31,062 | ||||||
Other current liabilities | 456 | 474 | ||||||
Total current liabilities | 125,024 | 112,030 | ||||||
Long-term debt, net of current maturities | 1,161,712 | 696,576 | ||||||
Deferred rent, net of current portion | 10,297 | 6,127 | ||||||
Deferred revenue, net of current portion | 25,916 | 8,440 | ||||||
Deferred tax liabilities | 1,730 | 1,629 | ||||||
Payable pursuant to tax benefit arrangements, net of current portion | 405,577 | 400,298 | ||||||
Other liabilities | 1,331 | 4,302 | ||||||
Total noncurrent liabilities | 1,606,563 | 1,117,372 | ||||||
Stockholders' equity (deficit): | ||||||||
Class A common stock, $.0001 par value - 300,000 authorized, 88,085 and 87,188 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 9 | 9 | ||||||
Class B common stock, $.0001 par value - 100,000 authorized, 9,544 and 11,193 shares issued and outstanding as of September 30, 2018 December 31, 2017, respectively | 1 | 1 | ||||||
Accumulated other comprehensive income (loss) | 256 | (648 | ) | |||||
Additional paid in capital | 17,237 | 12,118 | ||||||
Accumulated deficit | (118,964 | ) | (130,966 | ) | ||||
Total stockholders' deficit attributable to Planet Fitness Inc. | (101,461 | ) | (119,486 | ) | ||||
Non-controlling interests | (8,687 | ) | (17,451 | ) | ||||
Total stockholders' deficit | (110,148 | ) | (136,937 | ) | ||||
Total liabilities and stockholders' deficit | $ | 1,621,439 | $ | 1,092,465 |
For the nine months ended September 30, | ||||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 74,384 | $ | 54,772 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 25,947 | 23,982 | ||||||
Amortization of deferred financing costs | 2,041 | 1,439 | ||||||
Amortization of favorable leases and asset retirement obligations | 280 | 260 | ||||||
Amortization of interest rate caps | 1,170 | 1,552 | ||||||
Deferred tax expense | 19,654 | 21,344 | ||||||
Loss on extinguishment of debt | 4,570 | 79 | ||||||
Third party debt refinancing expense | — | 1,021 | ||||||
Gain on re-measurement of tax benefit arrangement | (354 | ) | (541 | ) | ||||
Provision for bad debts | 8 | 44 | ||||||
Loss on reacquired franchise rights | 360 | — | ||||||
Loss (gain) on disposal of property and equipment | 542 | (357 | ) | |||||
Equity-based compensation | 4,137 | 1,800 | ||||||
Changes in operating assets and liabilities, excluding effects of acquisitions: | ||||||||
Accounts receivable | 10,922 | 11,099 | ||||||
Due to and due from related parties | 3,174 | (580 | ) | |||||
Inventory | (3,450 | ) | 1,253 | |||||
Other assets and other current assets | 4,972 | (2,413 | ) | |||||
Accounts payable and accrued expenses | 2,426 | (16,985 | ) | |||||
Other liabilities and other current liabilities | (2,869 | ) | (724 | ) | ||||
Income taxes | 1,028 | (1,462 | ) | |||||
Payable pursuant to tax benefit arrangements | (21,706 | ) | (7,909 | ) | ||||
Equipment deposits | 4,950 | 5,951 | ||||||
Deferred revenue | 7,544 | (958 | ) | |||||
Deferred rent | 4,156 | 361 | ||||||
Net cash provided by operating activities | 143,886 | 93,028 | ||||||
Cash flows from investing activities: | ||||||||
Additions to property and equipment | (18,601 | ) | (23,229 | ) | ||||
Acquisition of franchises | (45,752 | ) | — | |||||
Proceeds from sale of property and equipment | 196 | 166 | ||||||
Net cash used in investing activities | (64,157 | ) | (23,063 | ) | ||||
Cash flows from financing activities: | ||||||||
Principal payments on capital lease obligations | (35 | ) | — | |||||
Proceeds from issuance of long-term debt | 1,200,000 | — | ||||||
Repayment of long-term debt | (709,469 | ) | (5,388 | ) | ||||
Payment of deferred financing and other debt-related costs | (27,191 | ) | (1,278 | ) | ||||
Premiums paid for interest rate caps | — | (366 | ) | |||||
Proceeds from issuance of Class A common stock | 1,106 | 172 | ||||||
Repurchase and retirement of Class A common stock | (42,090 | ) | — | |||||
Dividend equivalent payments | (881 | ) | (1,322 | ) | ||||
Distributions to Continuing LLC Members | (5,369 | ) | (9,308 | ) | ||||
Net cash provided by (used in) financing activities | 416,071 | (17,490 | ) | |||||
Effects of exchange rate changes on cash and cash equivalents | (234 | ) | 399 | |||||
Net increase in cash, cash equivalents and restricted cash | 495,566 | 52,874 | ||||||
Cash, cash equivalents and restricted cash, beginning of period | 113,080 | 40,393 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 608,646 | $ | 93,267 | ||||
Supplemental cash flow information: | ||||||||
Net cash paid for income taxes | $ | 3,777 | $ | 3,769 | ||||
Cash paid for interest | $ | 20,015 | $ | 23,637 | ||||
Non-cash investing activities: | ||||||||
Non-cash additions to property and equipment | $ | 2,217 | $ | 482 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income | $ | 20,472 | $ | 18,902 | $ | 74,384 | $ | 54,772 | ||||||||
Interest income | (2,025 | ) | (18 | ) | (2,480 | ) | (24 | ) | ||||||||
Interest expense | 17,909 | 8,938 | 35,725 | 26,735 | ||||||||||||
Provision for income taxes | 7,190 | 6,540 | 23,335 | 23,933 | ||||||||||||
Depreciation and amortization | 8,863 | 8,137 | 25,947 | 23,982 | ||||||||||||
EBITDA | $ | 52,409 | $ | 42,499 | $ | 156,911 | $ | 129,398 | ||||||||
Purchase accounting adjustments-revenue(1) | 527 | 336 | 941 | 1,116 | ||||||||||||
Purchase accounting adjustments-rent(2) | 198 | 174 | 548 | 561 | ||||||||||||
Loss on reacquired franchise rights(3) | 10 | — | 360 | — | ||||||||||||
Transaction fees(4) | 254 | — | 290 | 1,021 | ||||||||||||
Stock offering-related costs(5) | — | 41 | — | 977 | ||||||||||||
Severance costs(6) | — | — | 352 | — | ||||||||||||
Pre-opening costs(7) | 370 | 421 | 853 | 421 | ||||||||||||
Equipment discount(8) | — | (107 | ) | — | (107 | ) | ||||||||||
Early lease termination costs(9) | — | — | — | 719 | ||||||||||||
Other(10) | 19 | — | 685 | (573 | ) | |||||||||||
Adjusted EBITDA | $ | 53,787 | $ | 43,364 | $ | 160,940 | $ | 133,533 |
(1) | Represents the impact of revenue-related purchase accounting adjustments associated with the acquisition of Pla-Fit Holdings on November 8, 2012 by TSG (the “2012 Acquisition”). At the time of the 2012 Acquisition, the Company maintained a deferred revenue account, which consisted of deferred area development agreement fees, deferred franchise fees, and deferred enrollment fees that the Company billed and collected up front but recognizes for GAAP purposes at a later date. In connection with the 2012 Acquisition, it was determined that the carrying amount of deferred revenue was greater than the fair value assessed in accordance with ASC 805—Business Combinations, which resulted in a write-down of the carrying value of the deferred revenue balance upon application of acquisition push-down accounting under ASC 805. These amounts represent the additional revenue that would have been recognized in these periods if the write-down to deferred revenue had not occurred in connection with the application of acquisition pushdown accounting. |
(2) | Represents the impact of rent-related purchase accounting adjustments. In accordance with guidance in ASC 805 – Business Combinations, in connection with the 2012 Acquisition, the Company’s deferred rent liability was required to be written off as of the acquisition date and rent was recorded on a straight-line basis from the acquisition date through the end of the lease term. This resulted in higher overall recorded rent expense each period than would have otherwise been recorded had the deferred rent liability not been written off as a result of the acquisition push down accounting applied in accordance with ASC 805. Adjustments of $105, $100, $272 and $306 in the three and nine months ended September 30, 2018 and 2017, respectively, reflect the difference between the higher rent expense recorded in accordance with U.S. GAAP since the acquisition and the rent expense that would have been recorded had the 2012 Acquisition not occurred. Adjustments of $93, $75, $276 and $255 in the three and nine months ended September 30, 2018 and 2017, respectively, are due to the amortization of favorable and unfavorable lease intangible assets. All of the rent related purchase accounting adjustments are adjustments to rent expense which is included in store operations on our consolidated statements of operations. |
(3) | Represents the impact of a non-cash loss recorded in accordance with ASC 805 - Business Combinations related to our acquisition of six franchisee-owned stores on January 1, 2018 and our acquisition of four franchisee-owned stores on August 10, 2018. The loss recorded under GAAP represents the difference between the fair value of the reacquired franchise rights and the contractual terms of the reacquired franchise rights and is included in other (gain) loss on our consolidated statements of operations. |
(4) | Represents transaction fees and expenses related to the issuance of the Series 2018-1 Senior Notes in 2018 and the amendment of our previous credit facilities in 2017. |
(5) | Represents legal, accounting and other costs incurred in connection with offerings of the Company’s Class A common stock. |
(6) | Represents severance expense recorded in connection with an equity award modification. |
(7) | Represents costs associated with new corporate-owned stores incurred prior to the store opening, including payroll-related costs, rent and occupancy expenses, marketing and other store operating supply expenses. |
(8) | Represents a gain recorded in connection with the write-off of a previously accrued deferred equipment discount that can no longer be utilized. This amount was originally recognized through purchase accounting in connection with the acquisition of eight franchisee-owned stores on March 31, 2014. |
(9) | Represents charges and expenses incurred in connection with the early termination of the lease for our previous headquarters. |
(10) | Represents certain other charges and gains that we do not believe reflect our underlying business performance. In the nine months ended September 30, 2018, this amount includes $342 related to the reversal of a tax indemnification receivable. In the nine months ended September 30, 2018 and 2017, this amount includes a gain of $354 and $541, respectively, related to the adjustment of our tax benefit arrangements primarily due to changes in our effective tax rate. Additionally, in the nine months ended September 30, 2018, this amount includes expense of $590 related to the write off of certain assets that were being tested for potential use across the system. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Segment EBITDA | ||||||||||||||||
Franchise | $ | 37,075 | $ | 29,925 | $ | 113,793 | $ | 94,444 | ||||||||
Corporate-owned stores | 15,279 | 12,046 | 42,115 | 35,579 | ||||||||||||
Equipment | 9,654 | 7,683 | 28,579 | 23,587 | ||||||||||||
Corporate and other | (9,599 | ) | (7,155 | ) | (27,576 | ) | (24,212 | ) | ||||||||
Total Segment EBITDA(1) | $ | 52,409 | $ | 42,499 | $ | 156,911 | $ | 129,398 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(in thousands, except per share amounts) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 20,472 | $ | 18,902 | $ | 74,384 | $ | 54,772 | ||||||||
Provision for income taxes, as reported | 7,190 | 6,540 | 23,335 | 23,933 | ||||||||||||
Purchase accounting adjustments-revenue(1) | 527 | 336 | 941 | 1,116 | ||||||||||||
Purchase accounting adjustments-rent(2) | 198 | 174 | 548 | 561 | ||||||||||||
Loss on reacquired franchise rights(3) | 10 | — | 360 | — | ||||||||||||
Transaction fees(4) | 254 | — | 290 | 1,021 | ||||||||||||
Loss on extinguishment of debt(5) | 4,570 | — | 4,570 | — | ||||||||||||
Stock offering-related costs(6) | — | 41 | — | 977 | ||||||||||||
Severance costs(7) | — | — | 352 | — | ||||||||||||
Pre-opening costs(8) | 370 | 421 | 853 | 421 | ||||||||||||
Equipment discount(9) | — | (107 | ) | — | (107 | ) | ||||||||||
Early lease termination costs(10) | — | — | — | 1,143 | ||||||||||||
Other(11) | 19 | — | 685 | (573 | ) | |||||||||||
Purchase accounting amortization(12) | 3,934 | 4,622 | 11,776 | 13,867 | ||||||||||||
Adjusted income before income taxes | $ | 37,544 | $ | 30,929 | $ | 118,094 | $ | 97,131 | ||||||||
Adjusted income taxes(13) | 9,874 | 12,217 | 31,059 | 38,367 | ||||||||||||
Adjusted net income | $ | 27,670 | $ | 18,712 | $ | 87,035 | $ | 58,764 | ||||||||
Adjusted net income per share, diluted | $ | 0.28 | $ | 0.19 | $ | 0.88 | $ | 0.60 | ||||||||
Adjusted weighted-average shares outstanding(14) | 98,462 | 98,428 | 98,615 | 98,445 |
(1) | Represents the impact of revenue-related purchase accounting adjustments associated with the 2012 Acquisition. At the time of the 2012 Acquisition, the Company maintained a deferred revenue account, which consisted of deferred area development agreement fees, deferred franchise fees, and deferred enrollment fees that the Company billed and collected up front but recognizes for GAAP purposes at a later date. In connection with the 2012 Acquisition, it was determined that the carrying amount of deferred revenue was greater than the fair value assessed in accordance with ASC 805—Business Combinations, which resulted in a write-down of the carrying value of the deferred revenue balance upon application of acquisition push-down accounting under ASC 805. These amounts represent the additional revenue that would have been recognized in these periods if the write-down to deferred revenue had not occurred in connection with the application of acquisition pushdown accounting. |
(2) | Represents the impact of rent-related purchase accounting adjustments. In accordance with guidance in ASC 805 – Business Combinations, in connection with the 2012 Acquisition, the Company’s deferred rent liability was required to be written off as of the acquisition date and rent was recorded on a straight-line basis from the acquisition date through the end of the lease term. This resulted in higher overall recorded rent expense each period than would have otherwise been recorded had the deferred rent liability not been written off as a result of the acquisition push down accounting applied in accordance with ASC 805. Adjustments of $105, $100, $272 and $306 in the three and nine months ended September 30, 2018 and 2017, respectively, reflect the difference between the higher rent expense recorded in accordance with U.S. GAAP since the acquisition and the rent expense that would have been recorded had the 2012 Acquisition not occurred. Adjustments of $93, $75, $276 and $255 in the three and nine months ended September 30, 2018 and 2017, respectively, are due to the amortization of favorable and unfavorable lease intangible assets. All of the rent related purchase accounting adjustments are adjustments to rent expense which is included in store operations on our consolidated statements of operations. |
(3) | Represents the impact of a non-cash loss recorded in accordance with ASC 805 - Business Combinations related to our acquisition of six franchisee-owned stores on January 1, 2018 and our acquisition of four franchisee-owned stores on August 10, 2018. The loss recorded under GAAP represents the difference between the fair value of the reacquired franchise rights and the contractual terms of the reacquired franchise rights and is included in other (gain) loss on our consolidated statements of operations. |
(4) | Represents transaction fees and expenses related to the issuance of the Series 2018-1 Senior Notes in 2018 and the amendment of our previous credit facilities in 2017. |
(5) | Represents a loss on extinguishment of debt related to the write-off of deferred financing costs associated with the Term Loan B which the Company repaid in August 2018. |
(6) | Represents legal, accounting and other costs incurred in connection with offerings of the Company’s Class A common stock. |
(7) | Represents severance expense recorded in connection with an equity award modification. |
(8) | Represents costs associated with new corporate-owned stores incurred prior to the store opening, including payroll-related costs, rent and occupancy expenses, marketing and other store operating supply expenses. |
(9) | Represents a gain recorded in connection with the write-off of a previously accrued deferred equipment discount that can no longer be utilized. This amount was originally recognized through purchase accounting in connection with the acquisition of eight franchisee-owned stores on March 31, 2014. |
(10) | Represents charges and expenses incurred in connection with the early termination of the lease for our previous headquarters. |
(11) | Represents certain other charges and gains that we do not believe reflect our underlying business performance. In the nine months ended September 30, 2018, this amount includes $342 related to the reversal of a tax indemnification receivable. In the nine months ended September 30, 2018 and 2017, this amount includes a gain of $354 and $541, respectively, related to the adjustment of our tax benefit arrangements primarily due to changes in our effective tax rate. Additionally, in the nine months ended September 30, 2018, this amount includes expense of $590 related to the write off of certain assets that were being tested for potential use across the system. |
(12) | Includes $3,096, $4,086, $9,288 and $12,258 of amortization of intangible assets, other than favorable leases, for the three and nine months ended September 30, 2018 and 2017, respectively, recorded in connection with the 2012 Acquisition, and $838, $536, $2,488 and $1,609 of amortization of intangible assets for the three months ended September 30, 2018 and 2017, respectively, recorded in connection with historical acquisitions of franchisee-owned stores. The adjustment represents the amount of actual non-cash amortization expense recorded, in accordance with U.S. GAAP, in each period. |
(13) | Represents corporate income taxes at an assumed effective tax rate of 26.3% and 39.5% for the three and nine months ended September 30, 2018 and 2017, respectively, applied to adjusted income before income taxes. |
(14) | Assumes the full exchange of all outstanding Holdings Units and corresponding shares of Class B common stock for shares of Class A common stock of Planet Fitness, Inc. |
For the three months ended September 30, 2018 | For the three months ended September 30, 2017 | |||||||||||||||||||||
(in thousands, except per share amounts) | Net income | Weighted Average Shares | Net income per share, diluted | Net income | Weighted Average Shares | Net income per share, diluted | ||||||||||||||||
Net income attributable to Planet Fitness, Inc.(1) | $ | 17,471 | 88,458 | $ | 0.20 | $ | 15,345 | 85,734 | $ | 0.18 | ||||||||||||
Assumed exchange of shares(2) | 3,001 | 10,004 | 3,557 | 12,694 | ||||||||||||||||||
Net Income | 20,472 | 18,902 | ||||||||||||||||||||
Adjustments to arrive at adjusted income before income taxes(3) | 17,072 | 12,027 | ||||||||||||||||||||
Adjusted income before income taxes | 37,544 | 30,929 | ||||||||||||||||||||
Adjusted income taxes(4) | 9,874 | 12,217 | ||||||||||||||||||||
Adjusted Net Income | $ | 27,670 | 98,462 | $ | 0.28 | $ | 18,712 | 98,428 | $ | 0.19 |
(1) | Represents net income attributable to Planet Fitness, Inc. and the associated weighted average shares, diluted of Class A common stock outstanding. |
(2) | Assumes the full exchange of all outstanding Holdings Units and corresponding shares of Class B common stock for shares of Class A common stock of Planet Fitness, Inc. Also assumes the addition of net income attributable to non-controlling interests corresponding with the assumed exchange of Holdings Units and Class B common shares for shares of Class A common stock. |
(3) | Represents the total impact of all adjustments identified in the adjusted net income table above to arrive at adjusted income before income taxes. |
(4) | Represents corporate income taxes at an assumed effective tax rate of 26.3% and 39.5% for the three months ended September 30, 2018 and 2017, respectively, applied to adjusted income before income taxes. |
For the nine months ended September 30, 2018 | For the nine months ended September 30, 2017 | |||||||||||||||||||||
(in thousands, except per share amounts) | Net income | Weighted Average Shares | Net income per share, diluted | Net income | Weighted Average Shares | Net income per share, diluted | ||||||||||||||||
Net income attributable to Planet Fitness, Inc.(1) | $ | 63,226 | 88,064 | $ | 0.72 | $ | 36,599 | 76,435 | $ | 0.48 | ||||||||||||
Assumed exchange of shares(2) | 11,158 | 10,551 | 18,173 | 22,010 | ||||||||||||||||||
Net Income | 74,384 | 54,772 | ||||||||||||||||||||
Adjustments to arrive at adjusted income before income taxes(3) | 43,710 | 42,359 | ||||||||||||||||||||
Adjusted income before income taxes | 118,094 | 97,131 | ||||||||||||||||||||
Adjusted income taxes(4) | 31,059 | 38,367 | ||||||||||||||||||||
Adjusted Net Income | $ | 87,035 | 98,615 | $ | 0.88 | $ | 58,764 | 98,445 | $ | 0.60 |
(1) | Represents net income attributable to Planet Fitness, Inc. and the associated weighted average shares, diluted of Class A common stock outstanding. |
(2) | Assumes the full exchange of all outstanding Holdings Units and corresponding shares of Class B common stock for shares of Class A common stock of Planet Fitness, Inc. Also assumes the addition of net income attributable to non-controlling interests corresponding with the assumed exchange of Holdings Units and Class B common shares for shares of Class A common stock. |
(3) | Represents the total impact of all adjustments identified in the adjusted net income table above to arrive at adjusted income before income taxes. |
(4) | Represents corporate income taxes at an assumed effective tax rate of 26.3% and 39.5% for the nine months ended September 30, 2018 and 2017, respectively, applied to adjusted income before income taxes. |